Digital Finance and Financial Literacy: An Empirical Investigation of Chinese Households

Junhong Yang, Yu Wu and Bihong Huang
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Junhong Yang: Asian Development Bank Institute
Yu Wu: Asian Development Bank Institute
Bihong Huang: Asian Development Bank Institute

No 1209, ADBI Working Papers from Asian Development Bank Institute

Abstract: Using the 2015 and 2017 waves of the China Household Finance Survey, we measured financial literacy and study its relationship to households’ demand for digital finance. We found that a majority of households in the People’s Republic of China possess limited financial literacy. The low level of financial sophistication is responsible for the low usage of digital finance among Chinese households. Further, the positive impact of financial literacy on digital finance is more pronounced for wealthy, high-income, and young households, women, and households in urban and coastal areas. Our results are robust to using a variety of specifications and controlling for endogeneity, peer effects, cognition, and voluntary self-exclusion.

Keywords: financial literacy; digital finance; household finance; CHFS; People’s Republic of China (search for similar items in EconPapers)
JEL-codes: D10 D83 D91 G11 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2020-12-25
New Economics Papers: this item is included in nep-cna, nep-cwa, nep-fle, nep-pay and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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